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Farmer Brothers Co. Likes Its Cups of Coffee

A young man, Roy E. Farmer, opened his own coffee business in 1912, and today this company serves more than 60,000 food and beverage organizations throughout the United States. There are more than 115 Farmer Brothers branches across the U.S. Farmer Brothers is a foremost national manufacturer, wholesaler and distributor of an array of premier coffee products. In addition, Farmer Brothers is a distributor of tea and culinary products to food service establishments and retailers across the U.S. Farmer Brothers is headquartered in Fort Worth, Texas. The Company generated Net Sales of greater than $500 million in fiscal 2016.

The Company, over the years, started Spice Products Company and Custom Coffee Plan. It also acquired Coffee Bean International and Sara Lee’s DSD (Direct Store Delivery) coffee food service division. Farmer Brothers’ customers include restaurants, hotels, casinos, offices, quick service restaurants (QSR’s), convenience stores, healthcare facilities, as well as other foodservice providers. Its customers also include private brand retailers in the QSR, grocery, drugstore, restaurant, convenience store, and independent coffee house marketplaces.

About 50% of Farmer Brothers’ total sales is generated from roasted coffee products. The Company’s products include:

Roasted coffee

Liquid coffee

Coffee filters

Sugar & Creamers

Assorted teas

Cappuccino

Cocoa

Spices

Gelatins and Puddings

Soup

Salad dressings

Pancake & Biscuit mixes

Jellies & Preserves

Earlier this month, Farmer Brothers announced that it received a statement of support from Mr. Richard Farmer, member of the founding Farmer family. Richard Farmer stated, “As a longtime Farmer Bros. Co. stockholder personally owning approximately 0.6 million shares, a co-trustee of numerous Farmer family trusts that collectively own over 2.1 million shares, and a member of the Farmer family, I support the Company’s Board of Directors and management team. I believe the management team is executing the right strategy to position Farmer Bros. Co. to better compete and grow the business long-term and to honor the principles established by my grandfather when he founded the Company and upheld by my father when he ran the Company….”

For Q4 2016, the Company’s coffee volume increased 10.5% with improvements in its direct ship and DSD channels. For the fiscal year, Farmer Brothers processed and sold approximately 90.7 million pounds of green coffee versus 87.7 million pounds during fiscal year 2015.

Farmer Brothers has entered into an agreement to acquire China Mist (Scottsdale, Arizona), an enterprise that has an established distribution network and a growing worldwide business. China Mist is a strong brand in the premium tea category. China Mist has well-established national distribution in more than 20,000 food service locations throughout the country. Farmer Brothers’ anticipation is that it will close the acquisition in Q2 of fiscal 2017 subject to certain closing conditions.

Furthermore, Farmer Brothers has been chosen as the coffee supplier for 150 of SSP Group U.S. retail locations in 24 airports. SSP operates branded catering and retail units at more than 125 airports and 270 train stations globally as a concessionaire. SSP America operates 200 branded restaurants, and food kiosks and retail locations in 24 worldwide and regional airports in the United States.

Farmer Brothers Net Sales in its Q4 of fiscal 2016 were $134.2 million. This represents a 1.2% increase versus Net Sales in Q4 of fiscal 2015. As of June 30, 2016, Farmer Brothers had $21.1 million in cash and cash equivalents.